How to help keep costs down
The Canadian Federation of Independent Business (CFIB) has released a list of the cost to merchants of nearly every Canadian credit card.
“As all polling data shows, Canadians have enormous respect for small business owners, we ask consumers who may have a higher cost premium or corporate credit card to consider switching to one from the regular cost column,” CFIB's senior vice-president of legislative affars Dan Kelly says in a press release. “The good news is that there are dozens of credit cards out there offering consumers points without imposing sky high fees on smaller merchants.”
Mr. Kelly points out there are more than 200 MasterCard and Visa cards on the list, and says that over the past two years, premium cards for consumers have proliferated with many of them charging significantly higher fees. "Regular" cards generally cost about 1.75 per cent of a sale in total fees, and some premium cards can have a rate above 2.7 per cent, the organization's analysis shows.
Some other observations from the research:
• Of the major banks, Bank of Montreal and CIBC are the main issuers of “premium” credit cards for consumers in Canada – each with six separate high-cost cards. TD Canada Trust and Scotiabank have the fewest premium consumer cards, with one each.
• All credit unions, Desjardins, MBNA (recently purchased by TD Canada Trust) and Laurentian have no premium cards for consumers. HSBC has three of its four cards in the premium category.
• Many cards that offer points and rewards to consumers are actually regular credit cards and do not impose higher rates on merchants.
Don Lebeuf, an executive at MasterCard Canada, tells Stefania Moretti of QMI Agency that affluent premium cardholders are the most valuable customers for retailers. “These people will spend 47 per cent more per transaction (on average) than regular cardholders.
“That’s why there’s a different fee associated with premium cards.”
The release of the list comes on the heels of a CFIB campaign earlier this year, which encouraged consumers to consider paying with cash or debit cards instead of credit cards, a message reinforced with special signage it made available to merchants.
Canada leads U.S. in export category
Micro businesses – defined as companies with fewer than 10 employees – account for a fraction of exports in most Organization of Economic Development and Cooperation (OECD) countries, according to data released recently by the organization and reported by Small Business Trends. None of the OECD countries where data were collected had a share of exports belonging to micro enterprises that exceeded 21 percent of the nation’s total. What the study did find was a wide variation across countries in exporting by micro businesses, with the share of the total ranging from 3.6 percent in the Czech Republic to 21 percent in Slovenia. In Canada, 18.5 percent of exports came from micro businesses, compared with 10.3 percent in the United States. Whether this difference is explained by the size of the two nations, their industrial composition, or the strength of the micro business sector, Small Business Trends points out, Canadian micro enterprises are much better exporters than their American counterparts.
The size is right
Amy Abrams and Adelaide Lancaster, authors of the coming book The Big Enough Company, discuss at CNN Money the eight female entrepreneurs who have managed to strike the right balance between expanding their business and overextending themselves or risking disillusionment. While we continue on the subject of lists, you might also want to check out the 100 fastest-growing companies and the fastest-growing companies in troubled industries (a nifty little twist on the traditional).
EVENTS AND KEY DATES
The mobile frontier
It's Mobile Innovation Week in Toronto, which is designed to showcase thought leaders, developers, innovators, institutions and industry professionals in a series of events focused on exploring new mobile Internet frontiers, applications and business ideas. There's an event on Saturday at the Glenn Gould Studio, register here.
Call before you apply
Planning to apply for a loan from Women’s Enterprise Centre? Before you do so, you need to participate in one of its free weekly telephone-based information sessions. Facilitators review the lending criteria, answer questions and advise callers on how to apply. At the end of the session, an adviser will work with you to determine if you are eligible for a loan and ensure you receive an application. The sessions are held every Tuesday, and the times rotate between 10 am, 12 pm and 2 pm (PST).
EDITOR'S PICKS FROM REPORT ON SMALL BUSINESS
When to move on
When entrepreneurs sell their company, it is not uncommon for them to continue as employees, either because it's part of the deal to ensure a smooth transition or they are a valuable asset the new owners want to retain. One of the most difficult challenges for entrepreneurs who sell is to know when the time comes to move on. While they no longer own the company, they can still feel a sense of ownership, having built the company and hired many of its employees. It's has been interesting to watch the trials and tribulations of Michael Arrington, who started TechCrunch, the world’s leading technology blog, in 2005, Mark Evans writes in his most recent column.
FROM THE ROSB ARCHIVES
More demand, fewer profits
In February, 2011, reporter Rita Trichur spoke to small-business owners like Gerard Curran, who at the time said a growing consumer demand for points, rewards and other “freebies” offered by premium credit cards was squeezing profits because it is merchants who really foot the bill.
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